Economics • Banking & FinanceHard
Which of the following entities is legally empowered to issue commercial paper (CP) in the Indian money market, as per RBI guidelines?
A. All-India Financial Institutions, corporate bodies, and non-banking financial companies (NBFCs) meeting specified net worth criteria.✓ Correct Answer
B. Retail individual investors holding demat accounts with scheduled banks.
C. District Central Cooperative Banks with zero non-performing assets.
D. Foreign portfolio investors registered with SEBI.
💡 Solution & Explanation
Commercial paper is an unsecured short-term debt instrument issued by corporate bodies, all-India financial institutions, and qualifying non-banking financial companies meeting specific net worth criteria set by the Reserve Bank of India. Retail individual investors do not issue CPs, as this instrument is restricted to institutional money markets.
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